Brazil Senate Oks Tax Breaks For Computer Tablet Production

In a voice vote Wednesday, Brazil's senate gave final approval to a measure offering tax breaks for national production of tablet computers.

The bill, which offers manufacturers full exemption from the country's PIS and Cofins tax, will be sent to President Dilma Rousseff for signature.

According to government estimates, the tax breaks could help reduce the final cost of tablets to consumers by more than 30%.

The measure was introduced by the government as part of a series of incentives to attract foreign tablet manufacturers to the country. In addition to exemption from the PIS and Cofins taxes, the government has also pledged reductions in the IPI industrial products tax and the II import tax.

Of a total of 12 million computers produced in Brazil last year, only 100,000 were tablets.

Earlier this year Taiwanese computer manufacturer Foxconn announced plans to produce Apple's iPad tablet in the Brazilian city of Jundiai in Sao Paulo state. In addition to Foxconn (2038.HK, 2354.TW), manufacturers Motorola (MMI) and Asus (ASUUY) have also expressed interest in producing tablets locally.

In addition to tablets, Brazil has previously granted similar tax breaks for manufacture of other computer-related items, including personal computers, laptops, modems and peripheral equipment.

-By Gerald Jeffris, Dow Jones Newswires; (5561) 3335-0832, gerald.jeffris@dowjones.com

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